Countries making cuts are shrinking rapidly, enough to cause debt to GDP to rise even with budget cuts. Obviously, these countries may be growing slowly for other reasons, but the evidence of the impact of austerity runs deeper. Recent analysis by the IMF showed that austerity tended to generate GDP contractions. Further, the UK, which was not undergoing the same kind of stress in funding markets and arguably had more choice about whether to engage in austerity, is also struggling with slowing growth and rising unemployment.

Written by Richard Exell

I am the TUC’s Senior Policy Officer covering social security, tax credits and labour market issues, including the debates about the European social model and labour market flexibility. I also represent the TUC on the Industrial Injuries Advisor…